ATC091118: Report on Oversight Visits n four Provinces to investigate illegal mining activities

Mineral and Petroleum Resources

Report of the Portfolio Committee on Mineral Resources on the oversight visits in four Provinces to investigate illegal mining activities, dated 18 November 2009:

 

The Portfolio Committee on Mineral Resources, having undertaken oversight visits on 11 – 14 August 2009 in four Provinces to investigate illegal mining activities, reports as follows:

 

1.         Introduction

 

The Portfolio Committee on Mineral Resources, on 7 and 8 July 2009, held public hearings in Parliament to investigate the death in early June 2009 of over 86 suspected illegal miners at Harmony Gold Mine in Welkom, Free State. Major stakeholders, including the Department of Mineral Resources, the Chamber of Mines, mine houses, trade unions and civic organisations, participated in the hearings. Arising from the hearings the Committee agreed to undertake oversight visits on 11- 14 August, 2009, to some of the affected mines.

 

2.                   Composition of Delegation:

 

• Mr F Gona (Chairperson and Leader of Delegation) (ANC)
• Ms F Mathibela (ANC)
• Prof  L B G Ndabandaba  (ANC)
• Ms L Moss (ANC)
• Mr L C Gololo (ANC)
• Mr E J Marais (DA)
• Mr E J Lucas (IFP)
• Mr J Ramrock ( Committee Secretary)
• Mr K Lobi (Committee Assistant)
• Ms L Molefe ( Parliament Media Officer)

 

3.         Harmony Gold Mine, Welkom, Free State Province

 

3.1              Officials present

 

The Department of Mineral Resources (DMR) was represented by:

 

·         Mr Thabo Gazi: Chief Inspector of Mines,

·         Mr David Msiza: Deputy Inspector of Mines,

·         Mr J Bezuidenhout: Principal Inspector of Mines,

·         Mr Aubrey Tshivhandekano

·         Mr Deon Mathee, and

·         Mr Zakhele Hlongwane: Parliamentary Officer.

 

 

 

The South African Police Services (SAPS) was represented by:

 

• Provincial Commissioner A Mashego,
• Commissioner N Mojafe
• Director S Tshimane
• Senior Superintendent A Foley, and
• Captain K Hibert.

 

Harmony Gold Mine was represented by:

 

• Mr Johan Hennop,
• Mr Wessel Cronje,
• Mr Ambrose Khuzwayo,
• Mr Enock Moalosi,
• Mr Anton Buthelezi,
• Ms Estelle Cilliers,
• Mr Lebohang Shabe and
• Mr Melville Crafford.

 

The National Union of Mineworkers was represented by:

 

·         Mr Lucky Mazibuko,

·         Mr E M Olehile,

·         Mr M Mataboye.

·         Mr Eric Gcilitshane

·         Mr James Mbantwa

·         Mr Patrick Hlabizulu

 

Solidarity Union was represented by:

 

·         Mr Paul Mardon: Head: Occupational Health and Safety

 

3.2        Overview and Proceedings

 

Harmony Mines presentation

 

Harmony representatives made a presentation to the delegation on the extent of illegal mining activities at the mine. Frequent joint security operations involving SAPS and mine security have been conducted to try and ‘flush-out’ illegal miners from their underground hide-outs. This has unfortunately produced minimum results. The inter-linking of shafts from one mine to another makes it very difficult to control and contain the problem. An additional concern, to the company, is the increasingly high number of Harmony employees participating in these illegal activities. More than 29 employees, including management, were charged and disciplined in July 2009 bringing the total figure to 150. This is in comparison to 64 in 2007 and 80 in 2008. Overall figures also show a tremendous rise in the number of arrests of illegal miners. In 2007, 473 were arrested; in 2008 the number almost doubled to 757 and the current figure in July 2009 was 894. A similar trend is evidenced in the number of illegal miners killed in underground activities: 36 in 2007 and 105 in July 2009. Most of the illegal miners are foreigners from neighboring countries recruited under false promises who end up being trained at hostels like G-hostel. G-hostel has been raided by special units of SAPS a number of times, but still remains the main hub for these illegal mining activities.

 

The participation of members of SAPS and their crime intelligence unit in these criminal activities was also highlighted by Harmony and confirmed by officials of SAPS at the presentation. Future security operations will be conducted by SAPS units from outside the Free State because of suspicion of the involvement of the local SAPS in criminal mining activities. The involvement of mine security personnel and supervisors in these crimes have led to a number of them being arrested and others face disciplinary actions.

 

The company also screened a video tape to the Delegation that showed how mine employees were intimidated and viciously beaten by illegal miners. The tape also showed how corrupt employees were caught with food and other items strapped to their waist, to be sold underground to the criminals. Some illegal miners remain underground for up to six months before emerging to the surface. Young boys and women are also taken underground for prostitution by these criminals.

 

SAPS, in their briefing, mentioned that the real targets behind the funding of these criminals are based in Johannesburg and are not affected by the arrest of individual criminals. The kingpins, who represent the top level of the criminal hierarchy, remain untouched, whereas the lower levels of these syndicates bear the brunt of the law. These syndicates are highly organised and dangerous. The SAPS stated that the illicit product is purchased by legal gold selling houses and sold on the international market unhindered.

 

The Delegation was prevented by Harmony Mine officials from going down any of the shafts. The company claimed that they were not made aware of the request and therefore prior security arrangements were not made. The Delegation was not satisfied with this response. The Delegation was provided with inadequate protection and advised, therefore, by the DMR not to proceed to the shafts because of potential health and safety hazards. The Department received an intelligent alert that Members will be held hostage by the criminals if they go underground.  

 

 

 

3.3        Visit to Masimong shaft

 

The Delegation was also taken to one of the main entrance shafts (Masimong) at Harmony and shown how the security system has been upgraded to try and control access to the mine. Biometrics hand scanners have been introduced and the clocking system was upgraded. CCTV is operational at all turnstile gates and a scanner will be installed at the main intake center to screen all new recruits and prevent convicted persons from being employed. The illegal miners used closed small goods locomotives to exit shafts with stolen goods.

 

3.4        Visit to G-hostel

 

Members of the Provincial Portfolio Committee on Public Works joined the Delegation on their visit to G-hostel and undertook to do further oversight work in the area and share the outcome with the Delegation. The Delegation, escorted by the SAPS, made a short visit to G-hostel to try and get a better perspective on the activities related to illegal mining. The criminals were able to scatter a few seconds before the police could pounce on them. In their haste to escape they abandoned their equipment, which included trays filled with stolen gold bearing material ready to be processed.

The Delegation saw the problem first hand when one person was arrested for being in possession of narcotics. G-hostel is owned and managed by the municipality and is supposed to accommodate municipal employees and their families. The hostel residents complained to the Delegation that the local authorities were not concerned with their problems. The retrenchment of mine workers and others in the area resulted in a huge increase of residents. Foreigners practicing criminal activities also contributed to the increase in numbers. According to the SAPS many of the residents are involved in illegal activities, including the illegal selling of drugs, liquor and firearms. The living conditions of residents are very poor and most of the roads are strewn with sewerage and potholes are evident. G-hostel also poses serious health hazards to the inhabitants and contributes to low levels of learning in schools in the area and those schools situated nearby.

 

 

4.   Impala Platinum Mine, Rustenburg, North West Province

 

The visit to Impala Platinum Mine in Rustenburg was informed by the death of nine mine workers in an incident in late July 2009. The incident was still under investigation during the visit.

 

4.1              Officials present

 

Impala Platinum Mine was represented by:

 

·         Mr. Paul Dunne: Operations Executive

·         Mr. Frikkie Holl: General Manager

·         Mr. John Siemens: Mine Manager

 

    Health and Safety Representatives

 

The Department of Mineral Resources was represented by:

 

• Mr. Thabo Gazi: Chief Inspector of Mines
• Mr. David Msiza: Deputy Chief Inspector of Mines
• Mr. Thabo Ngwenya: Principal Inspector of Mines
• Mr Zakhele Hlongwane: Parliamentary Officer

 

The National Union of Mineworkers (NUM) was represented by:

 

• Mr. Lucky Mazibuko,
• Mr. Edwin M Olehle,
• Mr. M Mataboye,
• Mr. D M Mokgetsi,
• Mr. M D Madiketsi,
• Mr. G N Melakotso,
• Mr. T L Setlhabi,
• Mr. D L Rampou,
• Mr. T M Masilo,
• Mr. P Moilwa,
• Mr. S Dokolwana,
• Mr. S Rasolo, and
• Mr. I C Lesunye.

 

Solidarity Union was represented by:

 

• Mr. Paul Mardon: Head: Occupational Health and Safety

 

4.2        Overview and Proceedings

 

Department of Mineral Resources

 

Mr. T Ngwenya from the Department of Mineral Resources made a presentation on the Department’s perspective on the possible causes of the incident. He mentioned that there was a reduction in mine fatalities, from 66 in 2007 to 48 in 2008. The Department suspects, though, that some of the big mining companies are resorting to cost-cutting measures on mine health and safety standards to try and contain the current economic situation. Meetings were held with mining houses on this. Seismicity used to be a problem confined mostly to the gold producing industry, but it now includes platinum mining as well. Silicosis and noise induced hearing loss are some of the major illnesses experienced by mineworkers. Most of the fatalities, in the mines, are caused by Fall Of Ground (FOG), transportation and mining and machinery. It is believed that up to 95% of all mine incidents are preventable, including the recent one at Impala where 9 mineworkers lost their lives.

 

Investigations conducted on the incident by DMR pointed to gravity induced Fall Of Ground (FOG) accident and seismicity was not suspected. The incident originated from a weak side of a joint, where some hydra bolts apparently snapped. The FOG was thicker than the length of the hydra bolts.

 

The Department immediately conducted an in loco inspection and issued a notification in terms of section 54 of the Mine Health Safety Act (MHSA) on the same day. The section empowers an inspector to halt or suspend mine operations.

Impala was further instructed to:

 

a)       engage an external independent rock engineering expert;

b)       audit rock-related hazards in all working places; and

c)       review the Prevention Code of Practice and Procedure on FOG before any production work.

 

The Department, together with organised labour, mine management and experts, met almost daily before a withdrawal of the instruction, was issued. Some of the challenges that the Department still experiences with the mining sector, include:

 

• minimal prosecutions in mine accidents,
• non-adherence to mine standards and procedures,
• repeat accidents,
• drilling (by mine companies) into highly pressurized gas pockets,
• reluctance to investigate occupational diseases,
• exposure to blasting fumes, and
• unsafe working places declared safe.

 

The Department has instituted an investigation and the report is expected in two months time followed by a full enquiry on the incident.

 

4.3        Impala Platinum Mine

 

Mr. Frikkie Holl from Impala Platinum Mine shared the views of the company on the accident with the Delegation. Impala immediately dispatched a high powered team, which included senior management to the site of the accident. This was the worst accident experienced at Impala. The deceased miners were all rock drill operators. It was reported to Impala Management that the nine workers started their shift, after being given the go-ahead by their supervisor. The supervisor, when noticing the possible hazard at the work area, felt that re-enforcing the pillages of the mine shaft ceiling (mining roof bolt) would help. The assessment of the shift-boss (senior supervisor) 3 hours later, after inspecting the work area, was that the area was dangerous and instructed evacuation to another more secure work area. The FOG accident happened during the evacuation period. Impala Mine, as a result of the accident, has introduced new preventative measures, including changing production methods and strengthening routine inspection to prevent a future re-occurrence of the accident. The Delegation interrogated the presentation extensively and assured the company that the Committee will follow the investigation and enquiry closely. South Africa fared badly in comparative studies (Canada, England and Australia) on health and safety standards in mines. The Committee will make sure that the legislative measures that the Mine Health and Safety Act, as amended, allow be applied strictly in cases where violations occurred. The Chairperson commended Impala for the forward-looking steps they took since the accident. A moment of silence was observed by the meeting for the miners that died.

 

 

 

5.   Barberton Gold Mine, Barberton, Mpumalanga

 

5.1              Officials present

 

Department of Mineral Resources was represented by:

 

·         Mr. Louis Bezuidenhout: Principal Inspector, and

·         Mr. Mthokozisi Zondi: Regional Operations Manager

·         Mr. Zakhele Hlongwane: Parliamentary Officer

 

Solidarity represented by:

 

·         Mr. Paul Mardon: Head: Occupational Health and Safety

 

SAPS represented by:

 

·         Mr. Rudi Neethling: Head: Detectives,

·         CJ Ndubane: Communications Officer

 

NUM represented by:

 

·         Mr. Derrick Magagula: Chairperson, Barberton branch

 

Community represented by:

 

·         Pastor Humphrey Gininda: Community Police Forum

 

Barberton Mine represented by:

 

• Mr. Martine Jooste: Chief Security Officer,
• Mr. Roy Deysel: Security Manager,
• Mr. Mario Geri >Mr. Jan Nelson: Director,
• Ms Thandeka Ncube: Director: Group Transformation,
• Mr. Musa Nkambule: Community Liaison Officer,
• Mr. G van Aswegen: Shaduka shaft representative and

Health and Safety representatives

 

5.2        Barberton Gold Mine

 

The Delegation traveled to Barberton Gold Mine in Mpumalanga where Mr. Roy Deysel, Barberton Mines Security manager, made a presentation on the experiences of the company with illegal miners. Criminal miners have been operating at Barberton mine since 2000/2001. The mine has observed a large increase in the number of these criminals and their activities. These activities have not only become more brazen, organised and aggressive, but also more violent. The criminals are well armed with AK-47s, shotguns, 9mm pistols, R1 and R5 assault rifles. Employees, security guards and SAPS are now regularly threatened and assaulted. The activities of the illegal miners threaten the safety of employees underground. These criminals have been linked with illicit trafficking in firearms and proceeds derived from activities identified as sources of financing for terrorist activities. The United Nations Office on Drugs and Crime increasingly recognizes illicit trafficking in precious metals as one of the profit-generating activities of organised criminal groups. Gold and gold-bearing ore are now stolen everyday. Syndicates are equipping, arming and financing these criminal miners. Legitimate gold merchants inJohannesburg are ultimately involved by assisting with “gold laundering”. Barberton Mine loses in excess of R3 million worth of gold per month, while increased security cost the company R1 million per month. The loss of tax revenue for government exceeds R1.1 million per month. The influx of illegal immigrants and criminals to the area led to an increase in violent activities - seven illegal miners were shot and killed recently by other gangs for their gold. The police were shot at and some injured during an underground raid and as a result are no longer providing assistance with underground operations. Nearly 700 criminal miners were arrested in the past 12 months, with 340 being successfully prosecuted while 355 cases are still pending.

 

The criminals also make use of company locomotives to force their way out of the shafts.

 

In one particular case, during a security raid where a number of illegal miners were arrested, it was discovered that among those arrested were Harmony mine employees that were on leave. The company has increased its number of security guards and has 115 CCTV cameras at working areas. Disused entrances have also been sealed. It has instituted biometric/fingerprint access control and embarked on other security measures to try and prevent the criminals from gaining entrance to the mine. In one other case reported recently a criminal miner was killed and two injured underground when they fell down a steep ore pass when the ladders broke. According to the injured they were a group of nine but the front six managed to get out safely. They were from Matsulu town which is about 70km from the mine. This shows the extent of the influx from outside communities. The injured criminals also reported that there was another group still underground in that same area.

 

Further escalation of the illegal mining activities may result in the possible closure of mining activities. The impact of such steps could have a crippling affect on the community in general. Barberton Mine estimates that the number of criminal miners underground at certain times is in excess of 500, and they remain underground for five days and longer.

 

Reports from the police are that some of the most influential “bosses” earn in excess of one million rand per year. The organised groups consist of 4 to 30 members. Illegal gold buyers/illegal miners established their own protection groups which resulted in a number of deaths underground.

 

The SAPS representative also spoke of the small number of members operating in the province. The Delegation noted that this was a possible factor in the difficulty of arresting the situation.

 

The current legislation is not sufficient to curb the illegal activities of these criminals and should be reviewed. Most are charged under the Trespass Act which carries a fine not exceeding R2000. What are required are a more coordinated approach and the involvement of the National Intervention Unit and Task Force as well as the newly established Directorate of Priority Crime Investigations (The Hawks). The mine also showed the Delegation a video cassette in which mine security and a large number of illegal miners armed with AK 47s were involved in an underground shoot-out.

Shoot – outs between different gangs causing number of casualties has become daily occurrence. It was reported by a member of the police forum that the illegal miners do their gold processing from underneath a bridge in the area.

 

The Delegation, including organised labour and civil representatives questioned extensively on the presentation. The company agreed that more should be done to motivate the community to provide information on criminal activities in the area.

The Delegation observed that the situation in Barberton was not only unique but also very dangerous. In Barberton the criminals steal mining equipment openly. They also compete directly in the same shaft with the company for the gold. According to the Chief Inspector Directorate of 1999, mining companies must withdraw and wait for between 3-4 hours after blasting for re-entry and to resume operations. This is mostly to prevent possible rock fall accidents and the inhaling of toxic fumes. It is during this period that the criminals start their illegal activities with the stealing of mining produce and equipment. The Chairperson assured Barberton mine that the Committee will review the current legislation including the MHS Act and will make amendments to the Act if necessary. The Committee expressed concern regarding the directive from police management disallowing the police from engaging the criminals in underground operations.

 

6.   Coronation Coal Mine, Vryheid, KwaZulu-Natal

 

The Delegation was taken to Coronation Community Center, where members of the community raised their concerns on mostly social issues. The closure of the mine a few years ago contributed towards an increase in the number of criminal activities in the area, including illegal mining. Former mine workers were also not paid for work done during the time that the mine was operating. The village was supposed to be serviced by the local municipality but this was not happening. The desperate situation that members of the community find themselves in was being exploited by certain individuals from outside who encourage and fund illegal mining. 

 

 

6.1              Officials present

 

Department of Mineral Resources was represented by:

 

• Mr. Mthokozisi Zondi
• Mr. Jolly Mbatha

 

 

 

NUM was represented by:

 

·         Mr. Sifiso Nkosi

 

Solidarity was represented by:

 

·         Mr. Paul Mardon: Head: Occupational Health and Safety

 

The Vryheid Community was represented by:

 

·         Mr. A M Masondo: Councillor: Abaqulusi Municipality

·         Mr D Thabethe, community member

 

 

 

6.2              Kwanotshelwa village

 

The Delegation was taken to Kwanotshelwa village, a few kilometers from Coronation mine, and shown where the illegal miners were operating in the processing of high grade coal. The site is a stone’s throw away from nearby houses. The fumes, released with the burning of the anthracite coal, have health consequences for the nearby community. People have complained of suffering from respiratory and other related illnesses. The Delegation observed that most of the produce derived from illegal mining is utilized for domestic use and the rest are sold to the community for domestic use. The DMR will be encouraged to investigate whether this subsistence mining should be nurtured. 

 

7.  Conclusion

 

The country has lost so far more than 200 lives as a result of illegal mining. More than R5.6 billion in revenue is lost every year. The prevalence of markets, both local and international, for illicit gold, is a determining factor in the fight against these criminal activities.

 

The Portfolio Committee on Mineral Resources, having considered the written and oral submissions made by individuals and organisations at both the public hearings and the oversight visits, notes the following:

 

The presentations centered on a number of key concerns:

 

-          illegal miners included foreigners;

-          growing use of violence and firearms by illegal miners;

-          involvement of mine employees, management and mine security;

-          involvement of corrupt SAPS members;

-          the frequent arrest of lower rank criminals;

-          the need to pursue syndicate heads;

-          the need to tighten current legislation; and

-          the need to investigate markets for illicit minerals.

 

 

While there is consensus regarding the challenges and some of the solutions amongst the organisations, there are also differences in the approaches to address the respective situations.

 

8.        Recommendations

 

The Portfolio Committee on Mineral Resources hereby makes the following recommendations:

 

 

8.1       Legislation

 

The Committee, concerned with possible gaps in current mining and related legislation, recommends that the Department of Mineral Resources consider amending:

      

·         Regulation 3.1.1 of the Minerals Act, 1991, which deals with unauthorized entry at a mine, in order to increase the punishment to 12-30 months imprisonment;

 

·         Section 143 of the Precious Metals Act, which prohibits the buying, selling, deal in, receiving or disposing of any unwrought precious metals in order to increase the sentence from a fine of R2000 or six months imprisonment, to a minimum fine of R50, 000  with a maximum fine of R500,000 or 10 years imprisonment.

 

·         The Mine Health and Safety Amendment Act to increase the fine for non-compliance by mine houses in respect of the safe-keeping of explosives from the current R200 000 to a maximum fine of R1 million.

 

DMR should engage the Department of Justice and Constitutional Development to consider amending the Trespass Act in order to increase the sentence for violation to R10, 000 fine or 10 years imprisonment.

 

 

8.2          Foreign illegal miners

 

The Committee, concerned with the large number of illegal foreigners participating in illegal mining and other related criminal activities, recommends that DMR engage the Department of Home Affairs to tighten border controls and halt illegal immigration.

 

8.3          SAPS

 

Regarding the alleged corrupt members of SAPS involved in illegal mining activities, the Committee recommends that the Department of Mineral Resources engage the Department of Justice and Constitutional Development and the Department of Police for advice on the possible prosecution and sentencing of the corrupt officials. The Committee also recommends improving the co-operation and exchange of information between securities at mining houses, SAPS, SANDF, NIA. NPA and the Justice Department towards the arrest and prosecution of syndicate kingpins hiding in areas likeNorthcliff in Johannesburg.

The Committee recommends that DMR engage the Department of Trade and Industry (DTI) to assist in investigating who are the traders of illicit gold in Johannesburg and that their licenses are revoked.

 

8.4          Mine employees

 

The Committee, concerned with the participation of mine employees in illegal mining activities, recommends improving the co-operation between mine houses and organised labour on the dangers associated with this criminal activity. Trade Unions should discourage their members from participating or supporting illegal mining.

 

 

8.5                   Mine Companies

 

The Committee believed that the responsibility of access to mines rest with mine owners. Mothballed shafts at mines in the Free State and elsewhere are sealed off, thereby making it difficult for criminal mining. The Committee recommends that DMR hold mine owners accountable for the maintenance of security at all access points to the mines. The Committee further recommends to DMR and mine companies that small scale mining be encouraged before a mine is abandoned to prevent illegal mining activities.

 

8.6                   G- hostel

 

The Committee, concerned with the appalling living conditions in G-hostel, the huge backlog in the provision of housing and mindful of the separations of power, recommends that DMR engage the Welkom Municipality to consider converting the hostel into single family units and that the conversion be completed by the end of 2011.     

 

8.7                   Coronation Mine

 

The Committee further recommends that the DMR advocate the fencing off of the open cast coal shafts.

 

 

9.           Acknowledgement

 

The Committee wishes to thank all the stakeholders who participated in both the public hearings and the oversight visits. Their insights and contributions assisted the Committee in grasping the extent of the illegal mining activities carried out by criminals. The Committee, in particular, wishes to commend the Department of Mineral Resources (DMR) and Organised Labour (NUM and Solidarity) for the commitment and support provided during the public hearings and oversight visits. Special thanks also to Sister Linda and staff of the Catholic Church School in Vryheid, KwaZulu-Natal for the hospitality they extended towards the Committee.

 

Report to be considered.